Karla Lozano (right) talks with Laura Paniagua at the San Ysidro Health Center, where Lozano, 24, works part time and doesn’t qualify for health insurance. Lozano’s mother hopes to add her to her insurance policy. Peggy Peattie • U-T photos

Karla Lozano (right) talks with Laura Paniagua at the San Ysidro Health Center, where Lozano, 24, works part time and doesn’t qualify for health insurance. Lozano’s mother hopes to add her to her insurance policy. Peggy Peattie • U-T photos

Kamal Muilenburg calls the new health care law a relief, since she can add her 25-year-old daughter, who has an ongoing medical condition, to her plan.

Kamal Muilenburg calls the new health care law a relief, since she can add her 25-year-old daughter, who has an ongoing medical condition, to her plan.

Aiding small businesses

What: Small Business Health Care Tax Credit.

Purpose: The federal health-care legislation included this tax credit as an incentive for small businesses and nonprofit agencies to provide insurance for employees.

How it works: This tax credit began with the 2010 tax year. Employers must have fewer than 25 full-time employees earning an average of less than $50,000 a year. The employer must pay at least half of premium costs for single coverage. The maximum tax credit is 35 percent of premium costs paid by small businesses and 25 percent by nonprofits. The maximum credit would be given to companies with 10 full-time workers or less, earning an average of $25,000 or less. In 2014, the maximum credit will increase for two years to 50 percent of employer premium costs for small businesses and 35 percent for nonprofits.

Comment: Whether small business owners see the credit as enough incentive to increase their spending during a recession remains to be seen, said Ruben Barrales, president and chief executive of the San Diego Regional Chamber of Commerce.

“This is a decision employers will make based on cost and how important it is to the company to offer health care benefits,” he said.

“The good news in San Diego is there are a lot of employers that fit into this category. Interestingly, I haven’t heard much about this from our small business members. I think there’s an education effort that needs to be a part of this new credit.”

Barrales said he thinks many small business owners who would qualify are unaware of the credit and will discover they missed out on it when they fill out their 2010 tax return.

Aiding high-risk Californians

What: A new federal Pre-Existing Condition Insurance Plan and an existing state Major Risk Medical Insurance Program.

Purpose: Both programs offer help to some Californians denied individual health insurance because of a pre-existing condition. In California, the federal program is due to start providing coverage by October.

How they work: California has offered the Major Risk Medical Insurance Program since 1991, with funding this year to cover about 7,000 people. The plan has a $75,000 annual cap, $500 annual deduction and premiums that can be 30 percent higher than standard rates.

The far more ambitious $5 billion, four-year federal Pre-Existing Condition Insurance Plan was launched this year. In California, the program is run by the state with $761 million in federal funding.

An estimated 250,000 Californians qualify for the plan, but the funding will cover only about 25,000 people.

The new plan targets people who have been denied coverage because of a pre-existing condition and been uninsured for six months. There are no annual or lifetime caps and premiums are subsidized so they cost no more than standard plans.

The plan includes an annual deductible of $1,500, a $500 deductible for brand-name prescription drugs and an annual out-of-pocket maximum of $2,500. Premiums vary by age and by county, with San Diego County rates ranging from $127 to $904 a month.

Online applications for the program became available this month.

Comment: “We’re still shooting for coverage to start by the end of this month,” said Jeanie Esajian, spokeswoman for the Managed Risk Medical Insurance Board, the state agency overseeing the program. “We’ve been averaging about 11,000 hits a day on the website.”

Website: For information and an application for either program, visit pcip.ca.gov.

Starting Thursday

For all new or grandfathered* group/individual insurance plans:

Bans lifetime caps on coverage.

Bans rescissions, or dropping coverage because of an unintentional mistake on an application. Insurers have been known to do this when a policyholder gets seriously ill.

Grandfathered health plans were in existence on March 23, 2010, and have not been significantly modified. A new health plan is a plan not in existence on March 23 or a plan that has lost its “grandfathered” status because of modifications.

Bans insurers from denying coverage to children with pre-existing conditions, or excluding coverage of the condition. Does not apply to grandfathered individual policies.

Allows parents to keep a child on their policy until the child turns 26. Grandfathered group plans can limit this option if the child is eligible for his or her own employer-based insurance.

For new individual/group health plans:

Exempts preventive health services from co-pays and deductibles.

Ensures that policyholders choose the primary care doctor or pediatrician they want within their plan’s network, that referrals are not required for OB/GYN visits and that prior approval is not needed for out-of-network emergency room care.

Provides an appeals process for policyholders.

Starting Jan. 1

Individual/small group insurers must spend at least 80 percent of premium costs on direct medical care and improvements to care — or rebate the difference. Large group insurers must spend at least 85 percent.